Solar Panel Degradation in California: What 25 Years Actually Looks Like
Last verified 2026-09-08. Figures carry their sources at the foot of this page.
Every solar contract in California comes with an implicit promise: the panels will still be producing meaningful power in year 25. The number behind that promise is degradation — the slow, unavoidable decline in how much electricity a panel makes as it ages. Research on fielded crystalline-silicon panels, most widely associated with National Renewable Energy Laboratory studies (Jordan & Kurtz, 2012, expanded 2016), puts the median annual decline near 0.5%, with most systems falling somewhere between 0.3% and 0.8% depending on climate, mounting, and panel quality. That's a small number in any single year. Over 25 years it isn't.
This page walks through what that decline does to your system's output over the life of a contract, what a 25-year performance warranty actually guarantees versus what the separate product warranty covers, what California law does and doesn't backstop when a warranty gets invoked, when the inverter — not the panels — is the part that needs replacing, and how degradation interacts with a lease or PPA payment that's moving in the opposite direction: up, while your output goes down.
None of this is a reason to panic about a system already on your roof. It's a reason to know which numbers in your paperwork are load-bearing and which are marketing.
The Degradation Number: 0.3% to 0.5% a Year
Degradation is the gradual loss of a solar panel's power output as it ages — not a malfunction, just materials science. Sunlight exposure, heat cycling, and moisture slowly reduce a cell's efficiency. The commonly cited industry figure, drawn from field studies of crystalline-silicon panels compiled by researchers at the National Renewable Energy Laboratory (Jordan & Kurtz, 2012, updated 2016), puts the median decline at roughly 0.5% of original output per year, with most fielded systems landing between 0.3% and 0.8% depending on climate, racking, and panel quality. California's climate — hot, sun-heavy, low-humidity in most inland markets — sits in a fairly favorable range for module longevity compared to hot-humid climates, though rooftop heat buildup on low-clearance installations can push individual systems toward the higher end of that band. We were not able to re-pull the underlying NREL data live for this page, so treat 0.3–0.5% as a well-established industry range rather than a number your specific installer is contractually bound to. Your actual rate is whatever your panel's datasheet specifies, and it varies by manufacturer and technology (monocrystalline PERC, TOPCon, and older polycrystalline cells don't degrade identically). If a salesperson tells you your specific panels degrade slower than 0.3% a year, ask for the manufacturer's datasheet — that's a checkable number, not a talking point.
Two Warranties, Not One: Product vs. Performance
Solar contracts bundle two separate promises that protect against different failures, and conflating them is where most confusion starts. The product (or materials) warranty covers manufacturing defects — a panel that cracks, delaminates, or fails outright — and typically runs 10 to 12 years, occasionally up to 25 on premium panel lines. The performance warranty is a different promise entirely: it guarantees the panel will still produce at least a stated percentage of its original rated output at a given year, commonly structured as roughly 98% at year one followed by a slow linear decline to somewhere in the 83–88% range at year 25. If your panels underperform that guaranteed curve, the manufacturer owes you a remedy — repair, replacement, or a prorated payout, per the contract language. If they degrade faster than the literature-typical 0.3–0.5%/yr but still stay above the warranty's guaranteed floor, you have no claim; the performance warranty is a floor, not a promise that your panels will hit the median rate. This exact two-tier structure — separate coverage lengths, separate remedies — is exactly what California's consumer protection framework tells installers to disclose (see the next section). Read your specific manufacturer's warranty document for the real percentages; the ranges above are typical industry structure, not your contract.
What California Law Actually Guarantees — and Doesn't
California doesn't set a degradation standard by statute. What it does require is disclosure. The CPUC's California Solar Consumer Protection Guide directs installers to spell out panel and inverter warranty periods and coverage terms separately from the labor/installation warranty, and to disclose who bears replacement cost — and expected response time — if equipment fails after the warranty expires. Business & Professions Code § 7169 requires a solar disclosure document, with cost, complaint contact information, and your cancellation right printed in boldface 16-point type on the contract's front page; degradation and performance-warranty detail fall under the statute's optional "supporting information" category, not the mandatory line items, so don't assume it's automatically in front of you — ask for it. Separately, Business & Professions Code § 7159 gives you a 3-business-day right to cancel — extended to 5 business days for a "senior citizen," a term defined elsewhere in the Civil Code (§ 1689.5) as a buyer 65 years of age or older — and caps any down payment at $1,000 or 10% of contract price, whichever is less. Here's the part that matters most for a 25-year promise: California's Song-Beverly Consumer Warranty Act (Civil Code § 1791.1) caps the state's own implied warranty of merchantability at one year (with a 60-day floor), extending only as far as an express warranty when that express warranty is itself reasonable. Translation: a 25-year performance warranty is a private contractual promise from whoever issued it, not something California law independently guarantees for 25 years. If that company doesn't exist anymore, the number in your contract is only as good as who's left standing behind it.
The Math: How Small Percentages Compound Over 25 Years
A 0.2-percentage-point difference in annual degradation rate looks trivial written down — 0.3% versus 0.5% — but it compounds over a quarter century into a meaningfully different system. Run the arithmetic (not a warranty guarantee, just linear projection off year-one output) at three rates commonly cited in the literature, and the spread between the low and high end of the 0.3–0.8% range works out to roughly 12 percentage points of retained output by year 25. See the table below. The practical read: at the low end of the range, your system is still producing over 90% of its original output when a 25-year loan or lease term ends. At the high end, you're closer to 80%. Neither number is a defect — both are within normal expected behavior for crystalline-silicon panels — but they change the economics of a system you're financing for two and a half decades, particularly if your savings estimate assumed flat output rather than a declining curve. Ask your installer which rate your specific panel is rated for, and ask them to show you a year-25 production estimate, not just a year-one one.
The Inverter: The Part That Actually Gets Replaced
Panels are the part everyone worries about; the inverter is the part that's actually likely to need mid-contract replacement. Inverters are electronic components with a shorter typical service life than the panels they're attached to, and industry practice commonly separates standard string-inverter warranties (often shorter, sometimes extendable at added cost) from microinverter warranties (commonly written closer to the panel's own 25-year term to match it). We could not independently verify current inverter replacement pricing or exact warranty-length figures live for this page, and we're not going to publish a specific dollar number we can't source — that would violate the standard this site holds itself to. What we can tell you with confidence: ask your installer, in writing, before signing, (1) what warranty length applies to your specific inverter model, (2) whether it's a string inverter or microinverters, and (3) what replacement costs after that warranty expires. A degrading panel loses a fraction of a percent a year; a failed inverter can take your entire system offline until it's swapped. Get the number in writing rather than relying on an industry-average figure quoted verbally.
Lease and PPA Economics: A Rising Payment Against a Falling Output
If you own your system outright, degradation just means slightly less free electricity each year — a slow curve against a fixed asset you already paid for. A lease or PPA is a different shape of risk, because you're not paying for a fixed asset; you're paying an escalating price for a de-escalating output. California's Consumer Protection Guide notes that lease and PPA contracts commonly carry payment escalators in the 1–3% per year range, while the system underneath that payment is producing 0.3–0.5% less each year. Those two lines move in opposite directions for the entire contract term, and the gap between them — not either number alone — is the real cost story. The same guide lists a minimum energy guarantee (compensation owed if the system underperforms) as one of the specific questions it tells consumers to ask a lease or PPA provider before signing — it's a feature to ask about, not one every provider is required to offer — and separately notes that terminating a lease early or transferring it at home sale can carry buyout costs running into the thousands of dollars. PACE financing, separately, typically runs 10 to 30 years per the same source. Before signing a 20-to-25-year lease or PPA, ask for a year-by-year projection that shows both the escalating payment and the declining output side by side — not a single blended "average savings" figure that hides the crossover point where the two lines meet.
What Happens When the Company Behind Your Warranty Disappears
A performance warranty is a promise, and promises require someone solvent to keep them. This isn't hypothetical in California's solar market right now: Freedom Forever filed Chapter 11 on April 15, 2026, and its case converted to Chapter 7 liquidation effective August 7, 2026 (U.S. Bankruptcy Court, D. Del., Case No. 26-10522) — a public bankruptcy record trade press has reported affects more than 150,000 homeowners — and the company is now being wound down under a court-appointed Chapter 7 trustee rather than continuing to operate. Sunnova filed Chapter 11 in June 2025; under its confirmed reorganization plan, its lease, PPA, and service operations transferred to SunStrong Management, which now administers those legacy accounts. SunPower filed Chapter 11 in August 2024 and sold its remaining assets. None of this means every homeowner with one of these companies' names on their paperwork is out of luck — the workmanship/installation warranty (the installer's promise) and the panel manufacturer's performance warranty (a separate company's promise) are legally distinct, and one can survive even when the other doesn't. But it does mean the Song-Beverly point above isn't abstract: check your paperwork for which entity issued which warranty, confirm that entity is still operating, and don't assume a 25-year number on a page is worth 25 years just because it's printed there.
Illustrative output retained at three commonly cited degradation rates (arithmetic projection off year-1 output, not a warranty guarantee — your actual rate depends on your panel's datasheet)
| Degradation rate | Year 5 | Year 10 | Year 15 | Year 20 | Year 25 |
|---|---|---|---|---|---|
| 0.3%/yr | 99% | 97% | 96% | 94% | 93% |
| 0.5%/yr | 98% | 96% | 93% | 91% | 88% |
| 0.8%/yr | 97% | 93% | 89% | 85% | 81% |
When this is the wrong move
Degradation worry is often misplaced. At 0.3–0.5% a year, the decline is nearly invisible year to year — if your bill went up or your production dropped noticeably, look first at utility rate increases, a new shade source (a tree that grew in, a neighbor's addition), panel soiling, or a billing/net-metering change, all of which move the needle far more than ordinary aging in any single year. If you're financing over 7–12 years rather than a full 25-year lease, the cumulative effect barely registers before the loan is paid off. A system that's 5–15 years old and producing modestly less than day one is behaving exactly as expected, not failing. And ordinary degradation is a different thing entirely from a workmanship defect (cracked cells, delamination, connector failure) — those are product-warranty claims with their own remedy, not a degradation question. If your only concern is "will my 8-year-old system still work fine at year 20," the honest answer for most crystalline-silicon installations is yes.
Frequently asked questions
Does a 25-year warranty mean my panels stop working after 25 years?
No. Degradation continues at roughly the same slow rate before and after the warranty period — panels don't have an expiration date built in. What the 25-year performance warranty guarantees is that output won't fall below a stated floor (commonly in the 83–88% range, per typical industry structure) during that window. After year 25, the panels keep producing; there's just no contractual guarantee or remedy backing the number anymore.
What if my installer goes out of business — is my warranty gone?
It depends which warranty. The workmanship/installation warranty was the installer's own promise, and it generally doesn't survive the company — Freedom Forever's Chapter 7 liquidation (effective August 7, 2026, D. Del. Case No. 26-10522, a public bankruptcy record) is a live example. The separate panel manufacturer's performance warranty can still be valid if that manufacturer is still operating. Check your paperwork for which entity issued which promise, and confirm that entity still exists.
Is 0.3–0.5% a year something I should actually worry about?
On its own, no — it's a slow, roughly linear decline that most homeowners wouldn't notice year to year; a utility rate hike or a shaded tree branch will move your bill more than degradation will in any given year. It matters more as a cumulative figure across a full 20-to-25-year lease, PPA, or loan term, which is why the math is worth doing before signing rather than after.
Will I need to replace my inverter before the panels wear out?
In many cases, yes, at least once over a 25-year system life — inverters are electronic components with a shorter typical service life than panels. We don't have an independently verified current cost figure to publish here; ask your installer in writing for your specific inverter's warranty length and manufacturer replacement pricing before you sign anything.
Do lease and PPA payments really go up while my system produces less?
Often, yes. California's CPUC Consumer Protection Guide notes lease/PPA payment escalators commonly run 1–3% a year, while output is declining 0.3–0.5% a year in the other direction. Ask for a year-by-year projection showing both lines together — not a single blended savings number — before signing a 20-to-25-year contract.
Does California law guarantee my 25-year performance warranty will be honored?
Not independently. California's Song-Beverly Consumer Warranty Act (Civil Code § 1791.1) caps the state's own implied warranty at one year and extends only as far as a manufacturer's express warranty when that warranty is reasonable — meaning the 25-year number is a private contractual promise, only as good as the company that made it and still being in business to honor it.
The bottom line
Degradation itself — 0.3 to 0.5% a year — is real but small; the bigger risk in a 25-year contract is whichever company promised to stand behind that number still being in business to do it.
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Sources
Rates and incentive programs change. Each figure above traces to one of these.
- CPUC California Solar Consumer Protection Guide — Two-tier warranty disclosure structure, minimum energy guarantee as a question to ask, lease/PPA payment escalators (1-3%/yr), rate-escalation assumption cap (10%/yr as of 2025), buyout costs, PACE terms
- California Civil Code § 1791.1 (Song-Beverly Consumer Warranty Act) — Implied warranty duration cap (60 days to 1 year) and its relationship to express warranties
- California Business & Professions Code § 7169 — Mandatory solar disclosure document requirements (boldface 16-point type); degradation/performance detail as optional supporting information
- California Business & Professions Code § 7159 — 3-business-day cancellation right (5 days for a "senior citizen") and down-payment cap
- California Civil Code § 1689.5 — Definition of "senior citizen" as a buyer 65 years of age or older, for the extended 5-business-day cancellation period
- NREL — Jordan & Kurtz, Photovoltaic Degradation Rates: An Analytical Review (2012) — Industry-standard 0.3-0.8% annual degradation range (median ~0.5%); the 2016 Compendium update (Progress in Photovoltaics) is paywalled and not separately linked
- PV Magazine USA — Freedom Forever Chapter 11 filing report (Apr. 15, 2026) — Freedom Forever Chapter 11 filing date (April 15, 2026)
- Law360 — Freedom Forever Chapter 7 conversion report — Freedom Forever Chapter 11-to-Chapter 7 conversion, effective Aug. 7, 2026, D. Del. Case No. 26-10522
- Kroll Restructuring Administration — Freedom Forever LLC case docket — Official case administration site confirming D. Del. Case No. 26-10522 and case status
- Solar Power World — Freedom Forever homeowner guidance — Trade-press estimate of more than 150,000 homeowners affected by the Freedom Forever bankruptcy
- BusinessWire — Sunnova Chapter 11 plan confirmation (Nov. 10, 2025) — Sunnova Chapter 11 filing (June 2025), plan confirmation, and transfer of legacy accounts to SunStrong Management
- Electrek — SunPower Chapter 11 filing report (Aug. 30, 2024) — SunPower Chapter 11 filing date (August 5, 2024) and asset sale